Delayed Full and Final Settlement Payment Not Reflecting in Form 16

This query is : Resolved

Shivam Gupta (Querist)
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24 November 2021 Hi experts,

My last working day at my previous company was on 7th Mar, 2021.
Due to covid restrictions, I couldn't travel to my base location to return company assets. So my Full and final settlement was on hold.

Finally, I returned the company assets on 30th Sep, 2021 and I received Full and final settlement payment (Feb & Mar salary + leave encashment) on 27th Oct, 2021.
Please confirm, "Should this Full and final settlement payment amount be counted as income in FY 20-21 or FY 21-22"? Thank you.

Thank you.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 November 2021 As such it should be considered as salary income for FY 2020-21. But if in form 16 it is shown in FY 2021-22, then you have an option to declare it as per that. So, check form 16 and decide.

Shivam Gupta

Shivam Gupta (Querist)
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24 November 2021 Hi Sir,
Thank you for the response.
It is not present in the FY 20-21 Form 16 which I received in Jun, 21. They have not provided me updated Form 16 in Oct, 21.
I am concerned because if this income shows up in FY 21-22 Form 16, it would attract lot more taxes.
What is your take on this sir, should I ask my employer to get FY 20-21 Form 16 updated ?
Thank you.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 November 2021 That would be more advisable. But even if is declared in form 16 of next FY, you will be able to claim arrears relief u/s. 89(1) of IT act.

Shivam Gupta

Shivam Gupta (Querist)
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24 November 2021 Thank you very much Sir for clearing out the doubts.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 November 2021 My Pleasure ...

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